Takeaway: The Board may apply a “rule of reason” analysis in determining whether the testimony of a witness alleging a prior public use, sale, or knowledge under § 102 is corroborated sufficiently in a post-grant review proceeding.

In its Decision, the Board granted institution of post-grant review (“PGR”) of claims 1-21 of the ’166 patent.

According to the Board, the ’166 patent is related to a bailment scheme using storage containers. Petitioner challenged the ’166 patent as (1) patent ineligible subject matter, (2) anticipated by the Declaration of Mr. David Seeley, and (3) obvious over the combination of Hunsaker, Seeley, and the Declaration of Seeley. The Board adopted Petitioner’s proposed construction of the terms, “facilitating,” “time,” “summary request,” “delivery device,” “pickup device,” and “signature pattern.” The term, “in response to,” was construed as meaning “directly or indirectly in response to.”

Regarding the § 101 challenge, Petitioner asserted that claims 1-21 of the ’166 patent are directed to the abstract idea of “facilitating containerized storage” and do not add elements that amount to significantly more than the abstract idea. The Board noted that the claimed process uses containers designated for storing the property of a particular customer rather than storing their property in something other than a container. Given that bailment schemes are a “fundamental economic practice” and Petitioner’s unrebutted argument, the Board concluded that claims 1-21 are directed to an abstract idea. The Board determined that claim 1 does not recite elements that amount to significantly more than a patent on the abstract idea itself. Thus, the Board concluded that it is more likely than not that claims 1-21 are unpatentable under § 101.

Petitioner alleged that claims 1-5, 7-9, and 12-21 of the ’166 patent are anticipated by the testimony of Mr. Seeley. A combination of a Supreme Court decision and several Federal Circuit cases have led to the general rule that the testimony of witnesses alleging prior public use, or any other theory of invalidity under § 102, must be corroborated to prove the credibility of the testimony by clear and convincing evidence. The Board noted that there did not appear to be any binding precedent requiring PGR proceedings to require the testimony of witnesses alleging prior public use to be corroborated to show unpatentability; however, other USPTO proceedings have “emphasized the importance of corroboration in some form.” The Board determined that whether the testimony of Mr. Seeley is corroborated sufficiently will be determined by analysis under “a rule of reason,” which includes several factors that were spelled out in In re Reuter, 670 F.2d 1015.

The Board noted that neither Petitioner nor Mr. Seeley provide any evidence to corroborate Mr. Seeley’s testimony that the subject of claims 1-5, 7-9, and 12-21 was publicly used or publicly known before the effective date of the ’166 patent. Mr. Seeley offered testimony to show that he has been performing the claimed method steps using the Netsirv software system in conjunction with the operation of his storage business. Given that Mr. Seeley is an interested party and that Petitioner did not proffer any corroborating evidence, the Board determined that Mr. Seeley’s testimony alone is insufficient to establish a prior public use, sale, or knowledge. Thus, the Board concluded that Petitioner had failed to show that claims 1-5, 7-9, and 12-21 of the ’166 patent are more likely than not unpatentable under § 102. The Board reached a similar conclusion regarding Petitioner’s § 103 challenge.

NETSIRV and LOCAL MOTION MN v. BOXBEE, INC., PGR2015-00009

Paper 10: Decision Instituting Post-Grant Review

Dated: August 4, 2015

Patent: 8,756,166

Before: William V. Saindon, Justin T. Arbes, and Chirstopher L. Crumbley

Written by: Saindon